Transcript REFORMA FINANCIERA E INSTITUCIONAL DE LA …

International Road Federation (IRF)
German Agency for Technical Cooperation (GTZ)
Economic Commission for Latin America and the Caribbean(ECLAC)
Technical Assistance Program of the Federal Republic of Germany
Cutting Cost and Improving Quality
through Performance Specified
Road Maintenance
Contracts
by
Dr. Gunter Zietlow
1
e-mail: [email protected]
http://www.zietlow.com
Asian Development Bank, Manila, October 1999
International Road Federation (IRF)
German Agency for Technical Cooperation (GTZ)
Economic Commission for Latin America and the Caribbean(ECLAC)
Technical Assistance Program of the Federal Republic of Germany
Cutting Cost and Improving Quality
through Performance Specified
Road Maintenance
Contracts
by
Dr. Gunter Zietlow
2
e-mail: [email protected]
http://www.zietlow.com
Asian Development Bank, Manila, October 1999
Overview of
Presentation
Performance
3
Specified Road
Maintenance Management
Example Argentina
Example Australia and NZ
Example USA
Pilot Projects
Overview of
Presentation
Performance
Specified Road
Maintenance Management
4
Performance Specified Road
Maintenance Management
Performance Specified Road
Maintenance Management is the
optimization of actions in order
to keep a road network in stable
pre-defined conditions,
preferably on a long term basis.
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Performance Specified Road
Maintenance Management
Objectives:
 To improve road conditions
and/or reduce maintenance cost.
 To promote and encourage the
development and application of
innovative road maintenance
practice.
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Performance Specified Road
Maintenance Contract
A service level agreement
between the road authority and
a contractor concerning a
schedule of payments in return
for an agreed level of road
condition performance.
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Road Condition
Performance
Measurable parameters defining
the performance of road, bridge
and traffic assets in terms of
maintenance program
outcomes.
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Performance Specified
Road Maintenance Contracts
- Example of Performance Indicators -
Roughness (IRI)
 Visual appreciation
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Friction
 Deflection
 ......
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Potholes
Cracks
Rutting
Obstruction of drainage system
Others
Principal Contract Elements
Performance indicators defining
minimum physical road, bridge and traffic
asset conditions, leaving it to the
contractor as to how to achieve them.
 Payments are made periodically and
might be adjusted in accordance with the
change of certain factors, like inflation or
traffic volume.
 Penalties for non-compliance with terms
and conditions of contract.
 Duration of contract more than 10 years.
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Advantages
 Greater
efficiency and better use of
new technologies reduces road
maintenance cost.
 Road users, road administration and
contractor have a clear
understanding to what standards
roads have to be maintained
(increased transparency).
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Award of Contract
Based on the lowest discounted periodic
payments to be made to the contractor.
alternatively
 Based on the highest initial payment
offered by the contractor to the owner of
the road, on the basis of predefined
periodic payments to the contractor. Initial
payments can be substituted by physical
road works such as rehabilitation.
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TYPES OF CONTRACT
UNIT PRICES
TRADITIONAL
CONTRACTS
CONSTRUCTION
REHABILITATION
EMERGENCIES
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PERFORMANCE SPECIFICATIONS
LUMP SUM PAYMENT
PERFORMANCE
SPECIFIED
CONTRACTS
MAINTENANCE
Examples of Performance Specified
Maintenance Contracts in Latin America
COLOMBIA
ROUTINE
MAINTENANCE
GUATEMALA
ROUTINE MAINTENANCE
PERU
ROUTINE MAINTENANCE
BRASIL (DNER)
ROUTINE MAINTENANCE
SANTA CATARINA
ROUTINE MAINTENANCE
CHILE
ROUTINE MAINTENANCE
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ARGENTINA
CONCESSIONS WITH AND
WITHOUT TOLLS
URUGUAY
ROUTINE
MAINTENANCE
Overview of
Presentation
Performance
Specified Road
Maintenance Management
Example Argentina
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Performance Specified Maintenance
Contract. Example Argentina (1)
9600 KM of national roads are being
maintained and operated on the basis of
Performance Specified Maintenance
Contracts (concessions) since 1990.
 Tolls are being collected by the
concessionaire.
 Duration of contracts is 12 years.
 Contracts specify performance indicators,
complimentary services to be provided to
the road users, and penalties for noncompliance.
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Performance Specified Maintenance
Contract. Example Argentina (2)
Another 10000 km of national roads are
being contracted under a similar scheme.
 Duration of contracts: 5 years.
 Contractor will be paid periodically by
the government. The tolling scheme
cannot be applied due to insufficient
traffic volumes.
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Performance Indicators
Example Argentina
Pavements
 Bituminous concrete
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Concrete
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Roughness (IRI) : < 3,3 mts/km
Cracking : type 2
Bituminous surface treatment
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Roughness (IRI): < 2,0 mts/km
Rutting: <12 MM
Cracking: type 4 (according to the catalogue of the
D.N.V.) and less than 15% of the area evaluated

Roughness (IRI) : < 2,9 mts/km
Cracking : type 4
Performance Indicators
Example Argentina cont.
Pavements
Coefficient of friction: average minimum
0,4 per km (measured by equipment).
 Conditions of pavement borders: well
formed without settlements and cracks.
 Structural capacity: should be sufficient to
absorb traffic for 2 years after contract
expires.
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Performance Indicators
Example Argentina cont. 2
Examples of routine maintenance
Patching: there should be no potholes
Penalty: equivalent to 1000 liters of gas oil
per day starting 24 hrs. after detection of
the pothole.
 Cutting of grass and weeds: grass and
weeds should not exceed a height of 0,15
mts.
Penalty: equivalent to 100 liters of gas oil
per week and hectare starting 15 days
after violation has been detected.
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Performance Specified Maintenance
Contract. Example Argentina
Adherence to performance indicators is
being controlled by the Department of
Supervision of the National Road Agency.
 Inspection is being done monthly by
supervisors contracted by the Department
of Supervision.
 Department of Supervision contracts
annual audits of the contractors.
 Department of Supervision publishes
annual statistics on the performance of
the contractors.
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Overview of
Presentation
Performance
Specified Road
Maintenance Management
Example Argentina
Example Australia and NZ
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AUSTRALIA
PILOT PROJECTS (1)
2 two year maintenance management
contracts with consulting firms had been
awarded in 1991 for 100 km of urban roads
each.
 The contracts constituted a form of
“performance contract” where the product
was identified by the performance
parameters defined in the maintenance
manager’s Code of Practice.
 In one case a private contractor provided
the maintenance services and in the other
case a workforce of the road agency .
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AUSTRALIA
PILOT PROJECT (2)
 Contractor’s
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cost was 16% lower
than RTA workforce.
 RTA workforce increased work
productivity by 22% during the first
year.
 There was no difference in the ability
to respond to emergency situations
and in the quality of work undertaken
by the contractor and the RTA
workforce.
AUSTRALIA
PILOT PROJECT (3)
 Renewed
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tendering after 2 years
resulted in further reduction of
maintenance cost by 25%.
 Additional 10% effectiveness gain
resulting from resource flexibility
increased overall cost-effectiveness
by 50% after two years compared
with RTA workforce average rates
prior to the pilot project.
AUSTRALIA
PERFORMANCE SPECIFIED
MAINTENANCE CONTRACT
Includes all maintenance activities of
450 km of urban roads or 1900 lane km.
 Term of contract is 10 years.
 Asset conditions will be improved by
up to 15% at a saving of 35% with
relation to the region’s average
maintenance cost being 27% less than
prior to the introduction of contracting.
 Contract value is US$ 130 million.
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Cost of Road Maintenance
in Sydney
100
% 1991 Rates
80
60
40
RTA
SOR Contract
Transfield Contract
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(Performance Specified Contract)
0
28
0
10
20
30
40
Time (months from June 1991)
50
60
70
Contracting out can reduce road
maintenance cost
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PERFORMANCE SPECIFICATIONS
60
LOW
HIGH
50
80
UNITE PRICE CONTRACTS
100
100
FORCE ACCOUNT
0
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20
40
60
80
100
ROAD MAINTENANCE COST
120
%
AUSTRALIA
PERFORMANCE SPECIFIED
MAINTENANCE CONTRACT
 Contractor
proposed intervention
levels, schedule of payments and
reporting procedures.
 Reporting procedures include date
and time when performance
indicators exceed intervention levels,
actual response time, and action
taken.
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AUSTRALIA
PERFORMANCE SPECIFIED
MAINTENANCE CONTRACT
ITEMS
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Roughness
IRI < 2.5 and < 2.4 at the end of
contract
Surface defects
< 50 mm
< 50 mm
Underground drainage
-blocked
-siltation > 15%
Road markings
-missing, not legible, worn > 50%
-loss of reflectivity > 70%
Warning signals
-missing
-loss of reflectivity > 50%
-Traffic signals
RESPONSE
TIME
-----------
24 hrs.
4 hrs.
4 weeks
4 weeks
4 weeks
4 weeks
24 hrs.
4 weeks
2 hrs. to 7 days
Performance Specified Maintenance
Contract, New Zealand
Contract covering 406 km of national
roads was let for 10 years in 12/98
 Contract cost was 15% below
comparable cost of traditional
contracting
 Performance specifications are very
well elaborated
 Contractor is responsible for quality
control (quality manual, quality plan,
quality system procedures)
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Performance Specified Maintenance
Contract, New Zealand
Services
management of the asset
 routine, periodic maintenance and
rehabilitation of assets incl. bridges
 collection and management of asset
inventory data
 call-out and attendance to emergencies
 response to public request, complaints
and feedback
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Performance Specified Maintenance
Contract, New Zealand
Objectives of the Performance Measures
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Provide a contracted condition standard at
the commencement of services to be
compared to the conditions of the assets at
the completion of the contract.
Provide a means to monitor and assess the
Contractor’s performance during the
Contract.
Provide security to the Principal that the
condition of the assets and the services to be
provided are being measured during the
Contract.
Performance Specified Maintenance
Contract, New Zealand
Adjustment for rise and fall in costs
All prices in the price schedules and the
lump sum payment are subject to
adjustment for rise and fall in costs.
 The adjustment will be made once only in
each calendar year.
 The adjustments are on formulas covering
labor cost index, various producer price
indices, and farm expenses price index.
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Performance Specified Maintenance
Contract, New Zealand
Inspections and reviews

Network condition monitored by
contractor
 High
speed data collection
 Falling weight deflectometer
Asset maintenance monitored by
contractor
 Random audits by the Superintendent
 Independent annual audits
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Performance Specified Maintenance
Contract, New Zealand
Physical works performance measures (1)
 Network condition measures
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Sealed carriage way
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roughness
texture
rutting depth
skid resistance
seal and residual life on hand-back
….see above
Potholes
depressions
edge breaking
Performance Specified Maintenance
Contract, New Zealand
Physical works performance measures (2)
 Shoulders
 Drainage
 Controlled vegetation
 Traffic facilities
 Miscellaneous
 Bridges
 Structures
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Performance Specified Maintenance
Contract, New Zealand
Feature
Base condition
standard
Compliance during
PSMC
Response
time
Potholes
no potholes
4 days
Depressions
no ponding of
water >3mm
above surface
aggregate
no ruts greater
than 30mm depth
< 10 potholes with a
diameter >100mm on any
5km of lane length
< 30m in any one km of
wheelpath with >3mm
ponding
Rutting
Edge
breaking
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no more than 5m in any
100m length of wheel
track in any lane with
rutting exceeding 30mm
depth
< 2 meters of edge < 5 meters of edge break
break per km, seal per km
loss > 100mm
6 months
12 months
1 month
where sealed
shoulder is <
0.5m
otherwise 3
months
Overview of
Presentation
Performance
Specified Road
Maintenance Management
Example Argentina
Example Australia and NZ
Example USA
41
First Performance Specified Road
Maintenance Contract in the State of Virginia
(Comprehensive Agreement for Interstate Highway Asset
Management Services)
Maintain and refurbish 1250 lane-miles on
three Interstate Highways, 62 rest areas,
and 7 visitor centers
 5+ year contract since early 1997
 131 million US$ for 5 years with
approximately 16% savings over VDOT
cost
 Contractor is VMS
 15% of work is done by VMS staff
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Maintenance Management
Program (1)
 Asset
inventory and condition
assessment (updated annually)
 Pavement management program
 Bridge management program
 Snow and ice control operations plan
 Safety management and traffic
control plan
 Emergency response plan
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Maintenance Management
Program (2)
 Hazardous
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materials
communications plan
 Customer response plan
 Public information plan
 Implementation plan
 Annual work plan updated every 3
months
 Extensive reporting procedures
Outcome and Performance Targets
 Drainage
System
 Roadside Assets
 Traffic assets
 Pavement
 Bridges
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Examples of Performance
Criteria for Drainage System
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Asset
Outcome
Performance Tolerances/ Criteria
Target in % of
asset
Cross Pipes
(< 36 ft sq)
structurally sound
open drains
joints intact
adequate capacity
no erosion
95
< 10% deteriorated barrel
>90% diameter open
joints intact
end protection intact
no dip in road over pipe indicating
structural problems
Ditches,
paved
aligned
structurally sound
clean
95
< 1" settlement
< 25% spalled
no obstruction to flow of water
Sidewalks
and Ramps
smooth
safe
sound
90
no settlement > 1/2"
no unsealed cracks > 1/4"
< 25% spalled
Incident Response Times
 24
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hour duty roster available to local
EMS personnel, State Police, and
VDOT
 20 minutes response time by
Supervisor, during work hours, to
site and 45 minutes after work hours
 1 hour to set up lane closure during
work hours and 1 1/2 hours outside
work hours
Washington D.C.

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Planning to
maintain 74 km of
federal roads
within Washington
D.C. on a
performance
specified road
maintenance
contract
Overview of
Presentation
Performance
49
Specified Road
Maintenance Management
Example Argentina
Example Australia
Example USA
Pilot Projects
Pilot Project
Uruguay
 Extension:
359 km
 154
km bituminous concrete
 88 km concrete
 37 km bituminous surface treatment
 21 km forced impregnation
 59 km gravel
 Variable
 30
50
conditions
km of roads need initial rehabilitation and
others require strengthening during the
contract period.
Pilot Project Uruguay
Deadlines, Payments, and Sanctions
Contract period is 4 years
 Deadlines to comply with performance
indicators:

2
months for potholes
 6 months for other defects on main roads
 one year for all roads
The contractor is being paid a fixed
monthly fee per kilometer and type of road
surface.
 Sanctions for non-compliance

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Pilot Project Uruguay
Examples of Performance Indicators
Drainage systems, like culverts and
ditches, should be clean to allow for a
permanent free flow of water.
 Right of way should be clear of trash and
other foreign objects.
 Vegetation should not exceed 6 cm on the
median strip and 15 cm up to 5 m from the
borders of ditches.
 Traffic signs and markings: standards
defined by the Traffic Department apply.
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Pilot Project Uruguay
Examples of Performance Indicators

Remaining thickness of gravel surface layer:


Roughness ( IRI ) of pavements:





Absence of potholes
Settlements < 10 mm
Shoulders
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< 2,8 for bituminous concrete
< 3,4 for bituminous surface treatment
< 6 for gravel
Bituminous surfaces


5 cm during and 10 cm at the end of the contract
period
Absence of potholes and settlements
Pilot Project Uruguay
Redeployment of Displaced Staff
2
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routine maintenance contracts and
1 maintenance contract for traffic
signs and markings have been
concluded with former DNV staff.
 Contracts have been let for 4 years.
 The former DNV staff have the right
to take up their former employment
with the DNV, if they wish to do so,
within one year of contract
commencement.
PSMC - Uruguay
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Activities performed by small-scale
enterprises
Minor pothole
patching
 Cleaning of
pavement and
right-of-way
 Cleaning of
drainage system
 Maintenance of
road signs

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Vegetation control
 Clearing of land
slides
 Removing of bill
boards
 Emergency
response
 Erosion control

Pilot Project Montevideo (1)
 Extension:
1 050 000 m² (150 km)
 asphalt
concrete, concrete, cobble
stones, gravel
 Road
conditions vary
 Some
require initial rehabilitation
 Others need rehabilitation during
contract period
 Duration
of contract: 3 years with
possibility of a 3 year extension
 Contract value: US$ 8 millions
Pilot Project Montevideo (2)
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Pilot Project Montevideo (3)

Contract covers:
 rehabilitation works
 routine maintenance
standards
 emergencies

by performance
Method of payment
 initial
rehabilitation based on unit prices
(US$ 2.25 millions)
 fixed monthly payment per m² for each type
of road surface for maintenance,
rehabilitation after the first year and
emergencies
 after the initial 3 years of contracts, fixed
monthly payments will be reduced by 40%
Pilot Project Montevideo (4)
 Performance
measures (examples)
 potholes
repaired within 24 hrs
 minor cracks < 10% of road surface
 cracks and joints sealed
 drainage system clean to allow for
unhindered flow of water
 Evaluation
 detailed
for purposes of payment
analysis of 50 mts. each 500 mts.
 every 10th drainage structure
 traditional system used for initial
rehabilitation works
Pilot Project Montevideo (5)
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Pilot Project Montevideo (6)
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CHILE
Inspection system

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Inspections for purposes of payment done
once a month taking 10% of the road network
selected at random different stretches of 1 km
length;
Regular inspections done once a week
selecting 5% of the network at random;
Inspections due to complaint by the public;
and
Follow-up inspections to verify if contractor
rectified deficiencies detected by one of the
inspections mentioned above.
CHILE
System of payment

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During the monthly inspection the compliance of
performance standards is being evaluated for
each category having different importance. Based
on a pre-established formula compliance is
calculated as a percentage which is multiplied by
the monthly payment foreseen for 100%
compliance. During the first year of the contract
compliance has been around 95%, mainly due to
deficiencies related to road safety and right-ofway. In addition, penalties are being applied if the
contractor does not rectify deficiencies within the
time periods defined in the contract.
Comparison of Performance Specified
Road Maintenance Contracts
Country
Number of
Contracts
Length
in km
Maintenance
Cost per km and
year in US$
747
Duration of
Contract in
years
5
Chile
2(a)
r
3
70
542
2 995
2
1 (b)
Uruguay
1(a)
359
4
r,s
r
(drainage
system and
right of way
only)
r,p
Uruguay (me)
2
275
2 (b)
r
Uruguay
(Montevideo)
1(a)
1.5x106
sqm
3 (b)
r,p
Brazil
(Santa Catarina)
1(a)
375
5
r
C: 3 850
A: 3 200
B: 2 700
A: 5 000
1 950
(drainage
system
and right of way
only)
C: 4 750
A: 4 950
A,B and G:
3 100
A: 1.8/m2
C: 2.8/m2
G: 2.0/m2
A and G:
3 000
Colombia
Guatemala (me)
a)Contracts include some initial road rehabilitation works; b)Can be extended for one period of equal duration
65 r: routine maintenance; p: periodic maintenance; s: other services provided to users (telephone, ambulance, towing)
C: cement concrete; A: asphalt concrete; B: Bituminous treated; G: gravel
Performance Specified Maintenance
Contracts
- Critical Issues-
Performance indicators should be
comprehensive and clearly defined and
measurable.
 Penalties for non-compliance should be
sufficiently high to encourage the
contractor to comply in the first place.
 Control of compliance with
performance standards should be
strict.

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Performance Specified Maintenance
Contracts
- Implementation Strategy  Phase
introduction of
performance indicators.



Routine maintenance
Roughness and friction
Deflection
 Increase



67
time span of contracts.
1 to 2 years
4 to 5 years
< 12 years
 Monitor
implementation process.
VISION
Business
Opportunities
68
No
potholes
Transport Cost